The 2020 election results brought welcome news for the cannabis industry, with voters in five (5) states approving cannabis ballot measures to legalize the sale of cannabis. As a result, residents in Arizona, Mississippi, Montana, New Jersey, and South Dakota could soon have access to marijuana at state-licensed dispensaries. This is an extremely favorable outcome for sophisticated cannabis operators who are looking to expand their reach into new cannabis markets.
Cannabis Legalization Measures Approved in Arizona, Mississippi, Montana, New Jersey, and South Dakota
A total of five states had 2020 state ballot initiatives that addressed the legalization of cannabis. Those measures were a resounding success, with all five states voting “yes” and creating new cannabis markets. It will now be legal to purchase cannabis for recreational use in Arizona, Montana, New Jersey, and South Dakota. This brings the total number of states with legal adult-use cannabis to 15. In addition to legalizing recreational marijuana, voters in South Dakota also voted in favor of legalizing marijuana for medical use. This makes South Dakota the first-ever state to legalize both recreational and medical cannabis at the same time. Meanwhile, voters in Mississippi chose to legalize cannabis for medical use only.
Steve Hawkins, the executive director of the non-profit legal group Marijuana Policy Project (MPP), observed that the success of the cannabis ballot initiatives means that approximately one-third of the U.S. population now resides in states where cannabis is legal for recreational use. Hawkins also noted that the legalization of medical-use cannabis in Mississippi and South Dakota means that 70% of all states now allow for medical cannabis sales. Matthew Schweich, deputy director at the MPP, was optimistic that this number will grow in the future and possibly result in federal cannabis legalization: “If we can win in New Jersey, Mississippi, South Dakota, Montana, and Arizona, it’s going to send a really loud message to Congress that it’s time to fix this at the federal level in 2021.”
What Is the Economic Impact of Legal Cannabis in NJ, Arizona, Mississippi, Montana, and South Dakota?
It will now be up to the state legislatures in Arizona, Mississippi, Montana, New Jersey, and South Dakota to implement the voter-approved laws and create the regulatory structures for legal cannabis sales. Once this happens, experts project that the cannabis markets in these five states could generate more than $2.5 billion in annual revenues by 2024. From that total, New Jersey dispensaries may bring in almost $1 billion annually in recreational cannabis sales, while Arizona dispensaries could reach $760 million in yearly cannabis sales.
The regulated cannabis industry in the United States continues to pay huge returns on investment for cannabis operators, particularly during 2020 when the pandemic forced many other businesses to temporarily close their doors. While states across the country issued shutdown orders for most retail businesses, cannabis dispensaries were allowed to stay open as “essential businesses.” The success of dispensaries in states where cannabis is legal for either recreational or medical use has pumped a lot of money into state and local economies through tax revenues. The expectation among cannabis industry observers is that these trends will continue in municipalities throughout Arizona, Mississippi, Montana, New Jersey, and South Dakota now that cannabis can be legally purchased in those states.
What Does the Future Hold for Cannabis Legalization in the United States?
While most Americans currently have access to legal cannabis in the form of either medical marijuana or recreational marijuana, both the sale and use of cannabis still remain illegal at the federal level. The hope among cannabis legal reform advocates was that Democrats might take control of the U.S. Senate in the 2020 election, but it appears that Republicans could maintain a majority. Continued GOP control of the Senate likely means that it will be at least two (2) more years before there are any serious efforts to legalize cannabis federally.
Marijuana is currently classified as a Schedule I drug under the Controlled Substances Act (CSA). This federal law defines marijuana in the same category as other substances with “a high potential for abuse,” including heroin, LSD, and ecstasy. Although the reclassification of marijuana might not happen anytime soon, there is growing optimism that more and more states will legalize cannabis in the years ahead. For instance, the legalization of pot in New Jersey could prompt New York and Pennsylvania, New Jersey’s neighboring states in the Tri-State Area, to pursue cannabis legalization efforts of their own – particularly once lawmakers and residents in those states see the tax revenues that are generated by legal cannabis sales in the Garden State.
Contact Scythian Cannabis Real Estate
Scythian Real Estate is a full-service real estate partner to some of the largest and most successful cannabis operators in the country, including The Green Solution and Curaleaf. If you are a cannabis operator looking to expand into a new cannabis market, or if you are a cannabis operator in need of capital funding, Scythian may be able to help. Email us today.
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